[Grovenet] Chance to be involved in your future -

[Ron D'Eau Claire]

Oh, so you do agree with the position the AARP is taking in the initiative I
provided the link to read. As you quoted: "While the system that prevailed
during this "golden era" came to be regarded as the norm by (if not the
birthright of) American physicians and their patients, from a broader
perspective that system is clearly an unsustainable aberrancy. At some point
the mounting costs of "no limit" health care had to generate its own
backlash. * 
**The system had to implode.*

Strange, I would never have thought that from your original comments. 

I was just making folks here aware of the initiative for those who are
interested. 

Ron D'Eau Claire 


-----Original Message-----
From: grovenet-bounces at rdrop.com [mailto:grovenet-bounces at rdrop.com] On
Behalf Of Steven
Sent: Saturday, March 03, 2007 9:22 PM
To: Forest Grove local interests list
Subject: Re: [Grovenet] Chance to be involved in your future -




*The "economic" golden era*

Any health care economist worth his or her salt will tell you that from 
an economic standpoint, an ideal health care system is one in which 
patients pay directly for their medical care. In such a system, patients 
freely choose their own physicians, and together with their physicians 
make all medical decisions, mindful that any costs incurred thereby are 
theirs to pay. Cost controls are therefore automatic. During the 1920s 
and for the next few decades, this "ideal" system existed in the United 
States. Inasmuch as doctors at the time had very little to offer in 
terms of expensive (or effective) therapies, and since patients' 
expectations were (appropriately) low, this system worked extremely well 
from an economic point of view.

*The "medical" golden era*

This economic equilibrium began to falter in the 1930s, and the 
disequilibrium rapidly accelerated in the years following World War II. 
The first kink in the armor of direct contracting between physicians and 
their patients occurred during the Great Depression, when hospitals 
began to suffer from patients' inability to pay their bills. Over the 
initial objections of physicians, financially stressed hospitals 
prevailed on state legislatures to legalize the insurance schemes that 
became known as Blue Cross. In order to assuage the moral indignation of 
physicians, however, the Blues were created as non-profit, 
provider-oriented insurance organizations.

"Provider-oriented" meant two things. First, Blue Cross (and later, Blue 
Shield) did not try to tell physicians how to practice medicine. 
Physicians were free to practice as they saw fit, and the Blues would 
simply pay the bills on a fee-for-service basis. Second, the boards of 
trustees of local Blue Cross and Blue Shield organizations were loaded 
with prominent local physicians and hospital administrators.

Not only did such a system preserve the direct physician-patient 
relationship, it also paid the bills more reliably than did patients 
themselves. The system worked to so well that soon physicians became 
willing to countenance the formation of private health insurance 
companies, as long as those companies followed the same general 
guidelines set by the Blues.

Health insurance proved to be so popular that, during the wage and price 
controls of World War II, companies began offering it to their employees 
in lieu of higher wages. After the war, American labor unions began to 
demand that employers provide health insurance as a benefit of 
employment. The government liked this idea, too, and in order to 
encourage it, tax laws were changed to make the provision of this 
benefit extremely attractive to employers.

*It is important to note that this new tax policy created a fundamental 
change in how health care was paid for. In effect, it shifted a huge 
chunk of the fiscal burden for health insurance from consumers and 
employers to the government, where it remains to this day. *Within a few 
years, the majority of American workers had employer-provided health 
care insurance, heavily subsidized by the federal government.

Then in the 1960s, the federal government became directly involved in 
paying for American health care on a large scale with the institution of 
Medicare, and then Medicaid. Since that moment, the proportion of health 
care spending directly attributable to the government has steadily grown 
- from 24% of all dollars spent on health care in the 1960s, to 40% by 
1990. *Today, when you include tax subsidies for health insurance, fully 
51% of America's health care spending is accounted for by the 
government, and paid for by taxpayers.*

Since politicians can tax the people only so much, a lot of this 
spending has been piling up in the form of the national debt, awaiting 
our children and grandchildren.

But *for physicians and their patients in the second half of the 20^th 
century, the resultant system seemed nearly perfect*. While patients 
retained complete freedom of choice regarding which doctors and 
hospitals they used, and while the physician-patient relationship 
remained largely free of outside influence, somebody else was paying the 
bills. There arose an almost complete dissociation between providing 
(and consuming) health care, and paying for it.

*This economic arrangement did at least two things that would ultimately 
spell its own doom.** * *First*, it allowed the American health care 
myth to flourish - the notion that the best possible care should be 
provided to everybody, and that where health care is concerned, there 
are no limits. It created expectations that ultimately could not be met.

*Second*, this system fostered the development of the medical-industrial 
complex. Since any medical advance that seemed useful would be paid for, 
powerful corporations arose dedicated to meeting the bottomless demand 
for medical advances. The pharmaceutical companies, hospital suppliers, 
and medical device companies began turning out a steady stream of 
improved and expensive technology. Ironically (given that this whole 
system had evolved largely due to physicians' attempts to shield 
themselves from corporate influence), these corporations used their 
considerable marketing clout to influence the decisions, the practice 
patterns, and even the demographic distribution (such as patterns of 
specialization) of the medical profession.

The* bottomless expectations of patients and physicians,* coupled with 
the never-ending meeting (and flaming) of those expectations by 
industry, created a rapidly spinning positive feedback loop. The more 
health care the doctors and patients got, the more they wanted. The more 
they wanted, the more the medical-industrial complex was happy to 
provide. It was inevitable that those paying the ever-mounting health 
care costs (i.e., employers and the government) would eventually reach 
the breaking point. While the system that prevailed during this "golden 
era" came to be regarded as the norm by (if not the birthright of) 
American physicians and their patients, from a broader perspective that 
system is clearly an unsustainable aberrancy. At some point the mounting 
costs of "no limit" health care had to generate its own backlash. * 
**The system had to implode.*



Ron D'Eau Claire wrote:
> Nothing provides you with more security than your closed mind, Steven. 
> You are saved the effort of thinking and caring.
>
> You have lots of company.
>
> Ron D'Eau Claire
>
>
>   
>   
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